Steering through rental car rates / Getting the car you want at the price you want can be dicey

Margaret Webb Pressler, Washington Post

Published 4:00 am, Tuesday, November 11, 2003

There may be nothing as annoying or confusing as shopping for a rental car. Rates are all over the map, there are no guarantees that you'll get the car you ordered, and every year more fees get tacked on.

This is supposedly a competitive business. But if it's so competitive, why aren't consumers getting lower prices, better service and more transparent pricing?

The car-rental business, it turns out, doesn't conform to any of the business models that shoppers are used to. Because it's an enormously complex business, with each company juggling a huge number of cars, the industry focuses more on management of its fleet than on such consumer-friendly issues as simple pricing. And the industry doesn't get much pressure from consumers because renting a car is often an afterthought for vacationers or a corporate handout to business travelers. It's a service that's not used very often, and rarely on one's own home turf.

"Basically, car rental is one of those core services you take for granted unless you have a problem with it," said Jon LeSage, vice president and director of research for Abrams Travel Data Services, a car-rental market research firm in Long Beach.

Certainly the biggest challenge for consumers is finding the lowest price within a byzantine structure that borders on the deceptive. A few weeks ago, before a trip to Florida, I got quotes from Alamo and Hertz to rent a sport- utility vehicle for 10 days. Both came in at about $800, including taxes and fees. I decided to go with a full-size car instead, for about $600, even though it would be tight with luggage, baby equipment and two car seats.

A week before leaving, I noticed an Alamo ad offering SUVs for $235 a week and called the 800 number. The reservation agent first told me $257 a week, a bargain but not what was advertised. Then I noticed in the small print that one had to mention "Code TV" when booking. "Oh, that changes everything," the agent said.

I got my $235 rate, giving me a total after taxes and fees of about $450 for 10 days.

Apparently, my experience was not uncommon.

"It shouldn't be like that, that you have to produce the ad to get the best price," said Jim Pridgen, a travel agent with Waters Travel in Washingon, D.C. "It's a notoriously bad thing. In a lot of ways, it's worse than the airlines."

I tested this practice by calling five major car-rental companies for prices last week to rent an SUV at Dulles Airport in early November, I got prices from five companies, ranging from $284 at Alamo (again, I had to press for the discount) to $474 at Budget.

Perhaps the most shocking price came from Budget for a mid-size car. At first the agent offered me a price of $292.96 and said there were no further discounts available. But when I tried to get off the phone without booking, he said, "Wait, wait -- I see here we do have a promotion I can offer you," and he shaved more than $100 off the price.

"The idea that there are promotional rates that customers need to ask for is quite common, the same way you'd find in the hotel business," said Ted Deutsch, a spokesman for Cendant Car Rental Group, which owns both Avis and Budget. He likened it to standing in line at the dry cleaner behind someone who has a coupon when you don't.

Agents "are coming up with what you might call a rack rate until they are pointed in a different direction," he said.

Turns out the ever-changing pricing in the car-rental business stems from fleet management. Companies keep track of how many cars they have at each rental location and price accordingly.

"Sophisticated, complicated computer models are generating astronomical amounts of data every day," said LeSage of Abrams Travel Data. "Even a few minutes later the rates will be different because the system is saying 'Oh, we're not selling enough mid-size cars. Let's lower the rates.' "

The rates also will differ depending on where you get the quote: online, from a toll-free telephone number, through a travel agent or at the rental counter. The industry can get away with this because most people don't know to look at more than one place, and often they're doing it at the last minute when planning a vacation.

"You spend all this time getting a good airplane rate and hotel rate, and maybe you don't even think about the car until the day before," Abrams said.

One reason for that is that renting a car can be done so casually. There is no penalty for not showing up for a reservation, so travelers will often book with several companies while searching for the lowest rate. That can push the no-show rate to 30 to 40 percent, Abrams said, which wreaks havoc with attempts at fleet management and creates the cockeyed pricing system.

It seems to me that renters could be held more responsible, perhaps lose a deposit if they don't show and don't cancel. That would allow companies to keep better control of their fleet and simplify their pricing.

But no one expects that to happen. Abrams said one company tried it years ago, and none of the majors would follow.

Car renters already accept a lot. Online travel site Travelocity did a study of car-rental fees this summer and found the typical bill is boosted by more than 24 percent because of added fees and pass-through expenses. In Florida, my rental included a 9.8 percent concession fee, a $2-a-day Florida surcharge, a 5-cents-a-day waste, tire & battery fee and a 49-cents-a-day vehicle license fee. Plus, everything, even the fees, was taxed at 6.5 percent.

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As my travel agent put it, "It needs attention, big time."

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